Tariffs don’t apply to USA-made content. Some EVs are mostly made in the USA, others are mostly made in foreign countries.
By Wolf Richter for WOLF STREET.
The share of new EVs sold in the US in Q1 2025 rose to 9.83% of total new vehicles sold, up from a share of 9.26% in Q4 2024, and up from a share of 7.9% in Q1 2024, according to Experian’s quarterly report today. To be clear, these are battery-electric EVs without an internal combustion engine and do not include hybrids and plug-in hybrids.
We already saw that in California, non-Tesla EV sales soared in Q1 and all combined surpassed Tesla sales for the second quarter in a row, while Tesla sales dropped to a multiyear low, based on registrations data released by the California auto dealer association CNCDA earlier. Similar dynamics played out nationwide.
Top EV models and their US content.
US-made content in a vehicle is important amid the new tariff dynamics because tariffs don’t apply to US content; they only apply to the cost of foreign content (not retail price).
A Tesla Model 3, made in the USA with 75% US content, or a Model Y with 70% US content, is subject to much lower tariffs than a Ford Mustang Mach-E, made in Mexico with 13% US content, or a Honda Prologue, made by GM in Mexico with 12% US content.
So can Ford raise the price of a Mustang Mach-E to pass on the tariffs? Sure it can, but then sales will collapse and it can just go ahead and shut down production in Mexico because consumers will buy competing USA-made models from Tesla, Hyundai, and Volkswagen with a much lower tariff burden that manufacturers can easily eat without too much indigestion.
#1 and #2: Tesla’s Model Y was still by far the #1 bestselling EV, with a share of 25.4% of all EVs sold in Q1, despite all the Oh Elon! problems Tesla has faced. Tesla’s Model 3 was #2, with a share of 14.4% of all EVs.
Both models are made in the USA, and they both are among the vehicles, including ICE vehicles, with the most US-content: the Model 3 with 75% US content, which is at the very top of the list, and the Model Y with 70% US content, according to data from the National Highway Traffic Safety Administration (NHTSA).
#3 and #10, strange bedfellows: Ironically, the Honda Prologue was the #3 bestselling EV with a share of 4.9%, but Honda doesn’t have EV technology on the road – not yet. This is a General Motors product based on the Chevy Blazer EV, but with different sheetmetal and some Honda features.
And even more ironically, the Prologue outsold the Blazer EV by a wide margin: the Blazer EV was the #10 bestselling EV with a share of just 2.0%.
Both the Chevy Blazer EV and the Honda Prologue are made at GM’s Ramos Arizpe plant in Mexico. And they have just 12% US content.
#4: Ford’s Mustang Mach-E was the #4 bestselling EV, with a share of 4.5%. It is made in Mexico, with just 13% US content.
#5: Chevy’s Equinox EV with a share of 3.9%. It is made, you guessed it, at GM’s Ramos Arizpe plant in Mexico, with just 12% US content.
#6: Hyundai’s IONIQ 5 with a share of 3.1%. The vehicles that are made in the USA at its new plant in Georgia have 63% US content. But some versions are still imported from Korea.
#7: Tesla’s Cybertruck with a share of 2.72%, beating the next bestselling EV pickup, the Ford F-150 Lightning, by a hair. It is made in the USA and has 65% US content.
#8: Ford’s F-150 Lightning with a share of 2.71%. While it is assembled in the USA, it has only 29% US content.
#9: Volkswagen’s ID.4 with a share of 2.2%. Made in the USA, with a US content ranging from 68% to 71%, depending on the version.
Lease, loan, or cash: Monthly payments for the top 10 EVs.
Leasing is super-popular with EVs, and monthly payments are quite a bit lower than loan payments (though beware of the small print with leases, including the up-front payment).
Part of the reason is how the federal EV rebates are setup; they require a certain amount of US content of key components and materials, such as the battery. But vehicles that don’t qualify for the rebates can benefit from a loophole – as wide as a barndoor – that allows leased vehicles to qualify for the rebates, even if they don’t qualify under a purchase transaction [this nonsensical discrepancy is another reason why the rebates should be scuttled in the BBB].
Average monthly lease payments by model, of the top 10 leased EV models, range from $318 for the Volkswagen ID.4 (versus $667 for loans) to $684 for the BMW i4 (versus $866 for loans).
Honda is fully focused on leasing across all its models, and the Prologue was the most leased EV out there in Q1. Leases accounted for 89.8% of the sales, while 8.6% of the sales were financed with loans, and 1.7% were cash deals. Average lease payments came to $486 (versus $708 for loans).
The second-most leased EV of the top 10 leased EVs was the ID.4, with 88.1% leased, 6.3% cash deals, and 5.6% loans.
The Cybertruck, by contrast, was the most cash-purchased of the top 10 EVs: 24.3% of the sales were cash deals, 49.6% were financed by loans, and only 26.1% were leases.
The Model Y was the most loan-financed of the top 10 EVs with 50.0% of the sales being financed with loans, while 40.1% were leased, and 9.8% were cash deals. Average lease payments of $426 (v. $646 for loans).
Model 3 sales were 52.3% leases, 37.3% loans, and 10.4% cash deals. Average lease payments were $402 (v. $657 for loans).
For the Chevy Equinox, with 56.2% of the sales being leases, the average lease payment was $380 (v. $623 financed).
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NewsWeek: Millions of Americans See Credit Scores Plunge
The credit scores of millions of Americans have plummeted in the first quarter of the year as a result of rising student loan delinquency rates, following the end of a years-long pause on federal payments.
According to a recent report by the Federal Reserve Bank of New York, nearly six million student loan borrowers—nearly 14 percent—were 90 or more days delinquent or in default between January and March 2025.
The new data in the New York Fed’s report suggest that millions of Americans will have a harder time getting auto and mortgage loans at a time when many are already struggling with historically high monthly payments and rising costs across the board, or could face higher interest rates.
“The New York Fed says the average credit score drop for newly delinquent student loan borrowers is 177 points if they started with a credit score above 720, 140 points if they were between 620 and 719 and 74 points if they were below 620. Those are massive drops,” he said.
They can fix their credit scores by catching up on their student loan payments and getting current, and by keeping all their other payments current. No secret sauce here.
At least their Social Security payments aren’t getting garnished anymore 🤣👍
My understanding is that all of Social Security above $750 per month can be seized by the US Treasury for defaulted student loans, but the $750 is protected along with SSI. Is that not correct?
The Education Department announced that it would not garnish SS payments, a U-Turn after having announced that it would garnish the payments.
This issue of garnishment is not up to the Education Department but rather the US Treasury which has clearly indicated it would be garnishing Social Security as stated.
Does it matter? The banks have to make loans to stay in business. Lending standards might drop to where the borrowers are at, given our history of bailouts.
What matters, of course, is the resulting interest rates on loans.
Oh those poor dipshits who didn’t pay their loans. I feel so bad for them
Does that mean they won’t be buying new EV’s?
Is that why you posted that message? I am trying to make the connection to the topic of the article.
Too many suckers took student loans to get degrees in dumbsh!t fields like Communication or Dramatic Arts. Oh well, the professors, administrators, and staff got fat salaries by suckering these imbeciles into their useless majors. Looks like pay-back is around the corner for universities, as Trump is thinking of ending all federal funding for a bunch of them. OMG, the professors might have to find real jobs (good luck with that, the last person I would hire is a university professor).
The real gripe I have with student borrowers is that it seems like more people are treating college like some kind of 4-year resort vacation fantasy, as (anecdotally, obviously) young people are less inclined to go to a college if it doesn’t have certain amenities. This jacks up the amount students have to borrow, and why should the taxpayer have to pay for their excesses (or even just their basic loan if they are unable to pay it back)?
I was extremely fortunate that my parents paid for my college, but I spent very little – drank the cheapest beer and took in all the free pizza I could. College isn’t really supposed to be the easiest time of your life. (Mine was still memorable).
Be interesting to see what the One BBB will end up as and how they might impact future sales. Not really with considering until if and when it is signed into law. Obviously the future is EVs so just a matter of how fast we get there. Might be a rush for people to get EVs before end of year in the same way that people rushed out to get iPhones, albeit for different reasons.
The one incentive for Honda Prologue over GM Blazer is that Honda will allow you to use Apple and Google Car play in your car allowing access to web features using your phone’s data plan.
GM forces you to get OnStar Data plan ~$40/month through their vehicle infotainment system to get anything other than the basics. Tesla does the same, but is ~$120/yr through Starlink. Both want your usage data for marketing as always.
Consumers need to fight back against more monthly fees. Corporations will never stop the absurd punishment and young people will never get a good footing until we do.
Wolf,
You don’t have the break down of the lease vs loan by state do you? Wondering how much the difference boils down to all the states that still don’t allow direct sales/leases for Tesla/Rivian/etc which would force buyers to cash or loan? Unless the Tesla leases just aren’t as attractive as those from VW, Honda
By-state data wasn’t part of the report. It all went by model and lender-type.
The 2025 Q1 data of car registrations is “confusing” for TESLA. New car registration may lag the sale transaction by a few weeks up to a month. Elon’s DOGE activities did not get much attention until mid February or perhaps later. And TESLA was going through a production change with a new model. So the data for TESLA for Q1 was jumbled. Q2 data will be clearer since some of the Trump tariffs on Mexican or Canadian components were in effect all of Q2. I think that the political response to Elon’s DOGE activities will be much more dramatic, when the Q2 data is released. Gas prices in the West, especially CA remain close to $5 a gallon for regular. The $7,500 tax credit for certain EV cars has likely been enticing to some. The impact of the possible end of the $7,500 credit will impact many companies and car buyers. The average cost of regular gas is between $3-4 dollars, which isn’t high enough (except on the West Coast) to motivate buyers to switch from ICE vehicles. In other words, we don’t have much relevant data as to what is going on for EV vehicles since Q1 has many twists and turns (Elon, tariffs, gas prices, etc). obviously!
We pretty much need that $7500 lease rebate to move my brands EV’s. Without it…. well not sure who is going to pick up the slack.
I live in a blue collar neighborhood of Boston. I see Rivians and Lucids parked on the street, in residential areas. I have no comments, except to say I’m terrified of the day when those guys will come after my 401k because they have absolutely nothing saved …
The Rivian SUV is the only one I want but I’m not rich lol
Uh-oh, so I gotta watch out for you too!
Just give me a little of your 401k and I’ll let you drive it on Tuesdays
I’m really curious if Rivian will survive as a true player in automotive, or if they will go down in history as a company who gave it their all and didn’t make it. Once automakers profits start to dip, that sorting process will quickly work itself out.
Do not forget that Rivian has the Amazon van contract. That’s probably worth more to them than the consumer division.
Your 401k won’t be worth anything when that happens.
US oil output set for first annual DROP since pandemic!
Prices collapsed by half. Why produce more at these prices? Cut back production and let prices come back up, oldest game in town.
My wife and I are on good terms with the local Toyota dealer. We own a Tacoma and a RAV4 PHEV, and lease a bZ4X, Toyota’s much maligned EV.
The PHEV gets between 2.5 to 3.5 miles per kWh depending on the ambient temperature and the amount of regenerative energy returned when operating. The heater burns far more electrons than the a/c.
The bZ4X lease was based on both the subsidized lease barn door Wolf mentioned, an additional Toyota rebate and some other incentives. Altogether the three-year lease will total $17,500 for a car with a $49,000 MSRP. I have no plans to buy the bZ4X after the lease expires.
The RAV4 in the hybrid mode gets close to 40 mpg. Gas here is $2.80/gallon which equates to about 7-cents-per-mile. Electricity here is 22.5-cents-per-kWh. The 220V Level 2 charger in our garage is about 90% efficient. The direct per mile cost of EV operation of the RAV4 is between 7-10 cents-per-mile.
The bZ4X has 8-inches of ground clearance; an important consideration given our location in Michigan’s lake effect snow belt and the perilous state of pothole strewn road surfaces.
The first year we had the 2023 RAV4 PHEV it probably appreciated in value. The bZ4X would have been the polar opposite; drive it off the lot and immediately lose 30+% in depreciation. Registering both the EV and PHEV cost an additional $140/year; add another 1-2 cents-per-mile in operating costs.
The availability of Level 3 DC fast chargers locally is limited. There cheapest Tesla chargers at Panera Bread cost 50-cents per kWh.
I wouldn’t want to drag race with a Tesla, but the bZ4X is the best balanced car I’ve ever driven. Our local Deadman’s curve is the entrance ramp to I-196 from I-94. Ninety-six mph? No problem. There is absolutely no financial justification for buying a bZ when the lease expires. But Toyota’s upgraded 2026 bZ is another thing altogether.
Have you ever driven an “ultimate driving machine?” No Toyota out there holds even a slight candle to a BMW for balance and performance not to mention that Toyota’s are front wheel drive designs which makes 50/50 weight distribution and balance impossible. BMW offers a huge range of cars from Minis up through Rolls-Royce Scepters and has many models that are superb and wonderful to own and drive.
well the supra should have enough BMW in its blood to satisfy you, no?
No. It has nothing to do with BMW.
Both the Supra and the Z4 use BMW’s “Cluster Architecture Platform” and have a 97.2 inch wheelbase.
Both the Supra and the Z4 have their steering rack columns based on BMW’s G01 X3 rack and have a 15:1 steering ratio.
Both the front and rear suspensions in the Supra and Z4 are very similar. Toyota uses longer control arms up front than BMW. Camber adjustment between them is different as a result of this.
The Supra uses a BMW B58 inline-six engine under the hood.
Tetsuya Tada is the engineer at Toyota that’s behind the Supra’s creation.
Thank you for the detailed comment. Seems there at the end that 2026 bZ is a better version?
My wife and I own only one car, and I walk to work. We bought it just before prices spiked during COVID, so we plan to keep it until 2029 (Subaru Forester).
Definitely thinking of an EV by then.
I’ll bet you do, but a lot of people don’t realize how much time, money, and aggravation one saves by living close to work. I made it to my office today in just one full play of Cannibal Corpse’s “Scourge of Iron”.
I always think it would be quaint to ride my bike, but then coming home for lunch might be a rush job.
Fewer Kia Ev6s sold than Cybertrucks? That’s sad. The Kia is sharp.
Agree wholeheartedly. Big fan of the EV9.
Wolf – What do the manufacturers do with all of the lease vehicles at the end of their terms? Do they typically wholesale them or sell them direct? I was thinking that would be a good way to dip my toes into the water if there was a sufficient reduction in price and the battery was warranted.
Thanks,
Lease returns are either sold at auction or to the customer, or sometimes the dealer.
Thanks, Wolf. Didn’t see anything on Rivian’s or Lucid’s websites. May need to reach out directly.